[By Sopuruchi Onwuka]
The ANOH Gas Processing Company (AGPC) which drives the ANOH Gas Processing Project in Eastern Niger Delta has secured additional $260 million to fully close funding gaps and guarantee completion of the plant development.
The gas project which was initially announced to carry a cost profile of $600 million has now amassed about $680 million in combination of equity and debt funding sourced from parent partners and money market players respectively.
AGPC parent companies, Seplat and NGC, had previously provided a combined $420 million in equity funding.
The new $260 million syndicated loan came from a consortium of seven banks. Stanbic IBTC Bank Plc played the consortium advisor) while the rest of participating banks, including United Bank for Africa (UBA) Plc, Zenith Bank Plc, FirstRand Bank Limited (London Branch) / RMB Nigeria Limited, The Mauritius Commercial Bank Limited, Union Bank of Nigeria Plc and FCMB Capital Markets Limited pooled the credit funds.
The facility, according to the company, allows for an additional $60 million accordion at the time of completion to fund an equity rebalancing payment at that time, if considered appropriate. The total available credit is far less than the funding commitments of more than $450 million provided by the lenders. And Seplat explains that the excess funding commitments received by the company represents a significant oversubscription and a strong sign of confidence in the project.
The company stated that the maximum project cost would now be $650 million, inclusive of financing costs and taxes. It added that the new estimated project cost would fall below the original $700 million, following a cost optimization program.
Managing Director of AGPC, Mr Okechukwu Mba, said the new $260 million debt facility would make the project is now fully funded. And the Chief Executive Officer of Seplat, Mr Roger Brown, added that full funding of the projects is an important milestone for AGPC.
According to Mr Mba, gas from AGP project will be enough to generate electricity for more than five million people in Nigeria and also make the AGPC a significant supplier of gas to Nigeria’s power sector, support local employment.
Mr Brown also stated that the plant development is a clear path towards strengthening Seplat’s position as Nigeria’s leading indigenous diversified energy producer. “It will help us drive, alongside our government partners, Nigeria’s transition to cleaner, less expensive power generation. We are extremely proud to partner with the Nigerian Gas Company in this strategically important project, which will create jobs and prosperity in the Nigerian economy,” he declared in a company statement.
Mr Brown added that “Seplat will continue to diversify its business and invest in gas to help Nigeria develop its own natural resources, which in turn will drive more sustainable social and economic growth for a young, rapidly growing population.”
The Oracle Today reports that AGPC is a domestic processing and supply incorporated joint venture (IJV) floated to commercialize huge gas reserves in straddled gas fields operated Seplat in Oil Mining Lease (OML) 53 area located in Imo State, in the southeast zone of the country.
A replica of the project is also driven in a contiguous oil block operated by Shell Petroleum Development Company (SPDC) Nigeria Limited whose activities onshore Niger Delta is currently caught in legal turbulence associated with decades of hostilities with local communities that have protested the environmental footprints of the Anglo-Dutch multinational.
Both Seplat and Shell operate separate oil and gas exploration and production joint ventures with the Nigerian National Petroleum Corporation (NNPC) whose gas business unit, the Nigerian Gas Company (NGC), also participates in both projects.
With its hands full with court cases and community crises, Shell’s version of the gas processing project in the area has not indicated significant progress.
London listed Seplat declared that full funding of the project, which would see development of plants and facilities with capacity for processing 300 million standard cubic feet per day (Mmscf/d) of gas, would sustain its lead in domestic gas supply with around 30% of gas used for electricity generation.